Success of any reforms lies in overall development. I have heard nothing but tall claims as to how economic reforms initiated by Narasimha Rao Government in 1990's has kickstarted India's economic revival leading to overall prosperity. That quite a lot of it was media spin, we did know. The sceptics have been having a field day with the inability of the Government to reign in inflation and with the latest GDP growth figure slipping to less than 8%, there are definite signs of economic slowdown.
We have also heard Manmohan Singh talk about the trickle down effect of the reforms, which means that the poor will benefit in the long run. 17 years is a long time to assess the benefits that have accrued due to reforms. If the benefits have not trickled down in 17 years, it never will. Let us see whether it has. Have a look at the extracts from a latest World Bank Report on poverty (Slightly edited for brevity without altering any facts. Emphasis mine).
India has a higher proportion of its population living on less than $2 per day than even sub-Saharan Africa. That is the sobering news coming out of the World Bank’s latest estimates on global poverty.
The fine print of the estimates also shows that the rate of decline of poverty in India was faster between 1981 and 1990 than between 1990 and 2005. (This means that economic reforms, which started in 1991, have failed to reduce poverty at a faster rate)
India, according to the new estimates, had 456 million people or about 42% of the population living below the new international poverty line of $1.25 per day. The number of Indian poor also constitute 33% of the global poor, which is pegged at 1.4 billion people. India also had 828 million people, or 75.6% of the population living below $2 a day. Sub-Saharan Africa, considered the world’s poorest region, is better — it has 72.2% of its population (551m) people below the $2 a day level. The estimates are based on recently recalculated purchasing power parity (PPP) exchange rates, which makes comparisons across countries possible. The dollar exchange rates being referred to here, therefore, are not the ones used in normal exchange rates.
While the full report has not yet been released, a briefing note sent by the Bank had some of the data and showed that the poverty rate — those below $1.25 per day — for India had come down from 59.8% in 1981 to 51.3% by 1990 or 8.5 percentage points over nine years. Between 1990 and 2005, it declined to 41.6%, a drop of 9.7 percentage points over 15 years, clearly a much slower rate of decline.
4 out of 10 Indians live in poverty’
Think about this next time when we gloat over how much of an economic power are we post reforms. Also compare the above report to this one,
In 2007, India had 36 billionaires, according to Forbes, the largest amongst Asian Countries.The increase in the number of billionaires in India between 2005 and 2006 was almost 64 per cent while the increase at the global level was slightly more than 23.1 per cent.
So, pray tell me who benefits from the Reforms?
